FÁS SET up a "full formal investigation" headed by an assistant director general in the wake of its special audit inquiry into activities in its corporate affairs division, documents released under the Freedom of Information Act reveal, writes Colm Keena, Public Affairs Correspondent.

Assistant director general Oliver Egan was the investigating officer appointed to the inquiry. Asked what its outcome was, a spokeswoman for Fás said: "This is a confidential disciplinary matter between human resources and the individual staff member under investigation."

It is understood the person concerned was disciplined. He took extended sick leave after some of the content of the audit report entered the public domain earlier this year.

In a letter dated March 15th, 2007, the head of the audit committee on the Fás board, Niall Saul, wrote to the Fás director general, Rody Molloy, about the special audit report.

"It is the audit committee's view, already expressed, that the organisation should move quickly to conduct a full formal investigation into the very serious issues raised in the report with the executive manager concerned and that such an investigation should include the conduct of that executive during the course of the audit investigation.

"I note that the audit committee is awaiting the details from [assistant director general] Mr [Christy] Cooney covering the nature and scope of the investigation, the proposed process, including the list of issues to be investigated and the timetable involved.

"We have received a letter from him dated March 14th which falls short of our requirements in that respect and we have allowed him an extension until March 27th to comply with our requirements in respect of the investigation.

"We have been advised that Mr Egan is to be appointed as the investigating officer and this is recognised by the audit committee as a positive step reflecting the gravity of the issues to be examined. I reiterate that the audit committee is firm in its view that a full and comprehensive investigation must take place".

He said the committee wanted to be sure the proposed investigation would be sufficiently rigorous and comprehensive.

The Dáil Committee of Public Accounts has initiated an inquiry into Fás following public disclosure of some of the findings of the special audit inquiry.